Study: Pound for Pound, Amazon Trounces Google in App Cash

When considered on a revenue-per-user basis, iTunes is the leading app store for in-app purchase income, according to a recent study. But the gap between second and third place is tremendous. While Amazon's Appstore makes almost as much as iTunes on a revenue-per-user basis, Google Play lags way behind, taking in less than a quarter of iTunes' revenue-per-user in-app cash flow.

By Rachelle Dragani
Apr 2, 2012 10:49 AM PT

Amazon is becoming a major challenger in the overall app marketplace, according to a new report from Flurry.

Flurry looked at some of the top-ranked apps across three major app sources: Apple's App Store, Amazon's Appstore and Google Play. Together, the stores brought in 11 million daily active users. The study found that iTunes was the top earner in terms of revenue generated per active user based on in-app purchases.

However, the study also found a significant gap between revenue generated by in-app purchases in the Amazon Appstore versus Google Play: Amazon took in about nine tenths of the in-app revenue per active user iTunes generated. But Google Play, which includes what was until recently referred to as the "Android Market," received just 23 percent of the in-app money per active user that the leading app store brought in.

The study was conducted over 45 days in January and February of this year and was based on revenue from in-app purchases.

The data mirrors results from a similar Flurry study conducted at the end of last year, when it found that apps in the Android Market earned 24 cents for every dollar generated on the same app in iOS.

Amazon Rising

The report indicates Amazon is quickly growing in power as it battles in the app store space. Its Kindle Fire tablet runs a version of Android, but the company's Appstore is more tightly controlled than the more freewheeling Google Play store for Android applications.

"The value of an active user on Amazon is better than the value of an active user on a traditional Google Play Android app," Aaron Watkins, cofounder of Appency and analyst at GigaOM Pro, told the E-Commerce Times.

Amazon is no stranger to generating revenue online. Amazon's core business is online retail, and it was an innovator in one-click shopping, the Flurry report notes. Google, on the other hand, has its roots in search and advertising technology.

It's possible that Amazon's and Apple's advantages in the space can be attributed to their methods of saving customer information and making purchases easy.

"Amazon already has an established base of users who, having already provided their credit card information to Amazon, are able to make purchases with a single click," Brady Donnelly, editor at Fueled, told the E-Commerce Times . Conversely, Google is not a retailer at its core, and the Google Play base will mostly be a relatively new consumer group, albeit a large one considering the number of devices.

In addition, Apple and Amazon both have subscription models, unlike Google. Amazon also has a feature that allows developers the chance to be promoted in its Appstore.

"It's a promotional component unique to the store, and one that can provide developers with a significant boost," said Donnelly.

The company's online retail strength has allowed it to flourish in the space, said Watkins.

"Amazon is a serious contender," he said.

Keeping Momentum Alive

Before the Kindle Fire, though, the company didn't have as much of a chance to flex its muscles in the mobile app marketplace because it wasn't producing an iPhone or Android phone. Now Amazon's Fire is a growing tablet contender.

Attracting developers is key for keeping the momentum of Amazon's Appstore going.

"For developers, Amazon's strategy is particularly enticing for a number of reasons," said Donnelly. "The growth of the Kindle Fire, coupled with a relatively low number of available apps, would seem to have the effect of lowering competition. With Kindle Fire sales expected to grow, so will the benefit of developing apps for that user base."

Though Donnelly noted that Android devices connected to Google Play are greater in number than those connected to Amazon's Appstore, Amazon's clout won't go unnoticed among developers.

"With the strong emergence of the Kindle Fire, developers will follow the money," said Watkins